Search smh:

Search in:

Gretel Packer's trusts face $US1 billion lawsuit

Vanda Carson

GRETEL PACKER is facing a potential damages claim from the owners of a suite of US casinos which her brother James's listed gambling empire, Crown, agreed to buy 14 months ago.

Privately held Millennium Gaming Inc, which owns two Las Vegas casinos - one in Pennsylvania and a licence to operate a third in Las Vegas - has threatened to sue for a "significant" amount, believed to be more than $US1 billion.

They want to sue for breach of implied provisions of the sale contract or illegal interference with the sale contract signed by Crown, even though Ms Packer and the trusts were not a party to the sale agreement.

Millennium has accused Ms Packer and three family trusts - believed to represent each of her children Francesca, Ben and William - of being the fall-guys to allow Crown to scuttle the deal worth $US1.75 billion ($2.7 billion). In documents obtained by the Herald, Millennium claims Ms Packer is just pretending to be concerned about releasing her private financial details and those of three secretive family trusts, when really she is more concerned about saving Crown $2.32 billion.

That is the estimated fall in value of the suite of casinos since the deal was signed by Crown on December 11, 2007. The value of US casinos, as measured by the "Russell 1000" index of major US casino and gambling companies, has fallen 86 per cent in the past year.

Crown has told shareholders it still wants to go ahead with the deal.

It is not involved in the case before Delaware Chancery Court in the US city of Wilmington.

Gretel's lawyers say legal letters have been flying back and forth between them and Millennium since December. They say each side is "digging in its heels on their respective legal arguments" and assertions of what happened.

The dispute has arisen just weeks before Crown was set to hand over the $US1.75 billion. It has been waiting for the green light from the Pennsylvania Gaming Control Board (PGCB) before handing over the cash.

The deal cannot settle because Gretel and three family trusts applied to pull out of the PGCB licensing process on November 25 last year. Under US law, Gretel must have a licence to allow Crown to operate the racetrack casino it wants to buy in the state.

Gretel pulled out of the licence process because she didn't want to give the board "details" of the trusts' financial interests which it would have made public. Millennium lawyers say the privacy claim is nonsense, because Gretel had already revealed her finances to the PGCB when she was personally interviewed by officials in Melbourne on June 11 last year.

Gretel also gave financial details in her licence application submitted on April 9, and the three family trusts submitted their applications on May 27.

Gretel's lawyers have challenged Millennium to justify their accusation that Gretel and the trusts "colluded" with Crown "as a pretext for reneging on the purchase".